LEA Reporter – Spring, 2004
Greetings! And, a long-overdue update!
By Ronald Paice, Assistant Secretary
Welcome to the LEA Reporter.
It has been a while since we have updated this section to bring you news about the various activities of the LEA through this medium, and we hope you find it informative. We plan to publish the Reporter in the web site twice a year, following each of our two major meetings, with periodic updates should there be a need. For those who are not yet members, we hope the news draws your interest in the organization, and hopefully, membership.
There are many loss executives and senior claim people in our industry who are mission critical to conveying our message and in promoting interest for new members to join the LEA. The Executive Committee continues in its search for new and meaningful ways to best accomplish this task, and we encourage our membership population as a whole to assist us in this endeavor. If you have any suggestions, please be sure to make them known at one of our upcoming meetings.
What is the Loss Executives Association (LEA)?
The mission of the LEA is education – specifically centered on the property claim discipline. Our efforts take several forms. Primarily, we sponsor two educational meetings each year, usually in January and June, during which we host some of the most knowledgeable speakers and resources within the industry. These sessions are intense two-day workshops during which many of the latest “hot topics” of the day are discussed. Beginning with a business meeting of the members, followed by a general session and presentation to all members, the seminars then break into four separate in-depth workshops covering various topics. These sessions are repeated morning and afternoon each day to allow members to take advantage of attending multiple classes. Topics are solicited from our membership to determine the greatest areas of interest, and the innovative programs created to fill those needs. The Society of CPCU and the Society of Registered Professional Adjusters (RPA) have awarded our program accreditation in satisfying their continuing educational requirements. Additionally, we provide selective scholarships within the industry, as well as sponsoring the National Forum for Property Loss Professionals. All efforts go toward our goal of promoting interest in property claim education.
Mid Winter Meeting – January, 2004
Whether from the unusually cold winter or not, the attendance at this past January’s meeting in Tampa was a huge success! Including 45 spouses, a grand total of 377 people attended the function. The topics and presentation staff received very high marks. Kudos and thanks to Bob Barber, John Paulson and everyone else who helped facilitate another highly successful seminar. One change that highlighted the session was a “Gala LEA Evening at the Florida Aquarium”. The cocktail appetizers preceded a great dinner buffet and provided a nice diversion from the technical matters of the seminar.
Here are some of the highlights of the sessions:
• Overall, the program received ratings of either Excellent (77.3%) or Satisfactory (22.7%) by all respondents.
• General Session 1 – “Reinsurance” was received very well, with comments offered that we should have additional sessions on this topic in the future. The presenting panel was made up of Harold (Bud) Sofield, VP of Gen Re; Michael Pero, Sr. Property Facultative Underwriter, Gen Re; and Simon White, Claim Manager, L.J. Rock and Others – Syndicate 1200 at Lloyds, London, England.
• General Session 2 – “Shedding Some Light on the Blackout of 2003”, was very informative as the industry continued to await the final governmental investigative report into the event. Panel moderated by Joseph Gerber, Esq., Cozen & O’Connor; joined by Douglas Peterson, President of Douglas G. Peterson & Associates (engineers); Richard C Bennett, Esq., and Elliott R. Feldman, Esq., both of Cozen & O’Connor.
• General Session 3 – “The Northridge Earthquake Litigation – County of LA”, offered insight into how the market was held together through the case, and also shared some of the challenges and strategies from the case. Presenting were Matthew S. Ponzi, Esq., Foran Glennon Palandech & Ponzi; and G. Edward Rudloff, Esq., and Marjie D. Barows, Esq., both of Rudloff Wood & Barrows.
As normally done, four well attended concurrent workshops followed the General Sessions:
• “Business Interruption in the Age of Disaster” - dealt with some wide ranging business interruption issue associated with catastrophic fires, collapses, hurricanes, blackouts, earthquakes, industry consolidations, large deductibles and general market conditions. Moderated by James Harrington, Esq., of Robins Kaplan Miller & Ceresi, Boston, the panel included Donald Corrigan, GABRobins; Jack Damico, Matson, Driscoll & Damico, LLP; and Scott MacPherson of VeriClaim.
• “Adjusting Commercial Losses with Landlord and Tenants – The Interplay of Commercial Leases and Property Insurance Coverage” – examined the adjustment issues that can only be resolved through thorough review of the legal agreements between the parties governed by commercial leases. Panel moderator, Christopher Poverman, Esq., Shaw Pittman, LLP, was assisted by William Guernsey, Director and Paul Lettau, Director, Travelers Property Casualty; Charles Reilly, President, E.R. Reilly & Co; and James Galphin, Utica National Insurance.
• “Fire Investigations for the 21st. Century” – case studies of actual fires and explosions showcased some of the cutting edge of fire and explosion investigations and how they can be successfully communicated in the courtroom of the future, using computer fire simulations and animation to show causation and propagation. This workshop was presented by Randolph (Randy) Harris, Chemical Engineer and Certified Fire & Explosion Investigator, Fay Engineering Corp.; and Peter Jones, Esq., Hall & Evans.
• “Appraisal in Large Losses – What Are the Unique Aspects” – Dealing with recent huge appraisal awards that have caught the attention of the industry, the workshop focused upon some of the unique features of large loss appraisals, including the importance of the submission and the form of the appraisal award itself, among other issues. Christopher Troy, Esq., Hecker Brown Sherry & Johnson moderated the session, assisted by Stephen Pate, Esq., Fulbright & Jaworski; Clayton Farnham, Esq., Drew, Eckl & Farnham; Joyce Wang, Esq., Carlson, Calladine & Peterson, LLP; and Stephen Goldman, Esq., Robinson & Cole.
The LEA membership is currently made up of 238 “Regular”, 318 “Associate” members, 64 “Retired” and two (2) “Emeritus” members. Following our April, 2004 Board of Directors meeting, four (4) additional members will be presented to the membership for approval. Already deleted from the “Regular” membership roll were 28 individuals who had not paid their 2003 dues. There were no delinquent “Associate” members. There are also, 67 pending applications for Associate membership. However, LEA By Laws regulating the ratio of “Regular” to “associate” members will not allow the addition of new associates at this time.
The LEA is continually reaching out to the industry in an effort to increase its membership, and especially excited about the prospects of expanding the roster internationally. To that end we have begun reaching out to the European community for members through our contacts there. We believe that this relationship will provide some new and informative views on the industry and be of great benefit to the overall organization as well.
LEA Web site – www.lossexecutives.com
Please note the change in our web site address: www.lossexecutives.com . Should you attempt to access the old site, you will be automatically rerouted to this new address. We have been working diligently to enhance the site, and we hope that the improvements made make it more user friendly, so access to the information is easier. There will be a demonstration of the new site at the June Meeting.
The LEA will also be offering “Publisher Accounts” to its members which allows them to enhance their individual membership listings. There will be an annual cost for he enhanced listings of $250 for the first listing and $50 for each additional branch that it to be enhanced. Look for more on this topic at the June meeting.
Scholarships and Educational Updates
• The LEA continues to be the sponsor of the National Forum for Property Loss Professionals. Founded in 1984, the Forum is a non-profit educational organization dedicated to the development and implementation of educational programs that are superior in content and quality, and focus upon the practical handling of contemporary technical issues in property insurance claims. This year the Forum will be held from November 9 through 12, 2004, at The Doral Forrestal Princeton, Princeton, NJ.
This program is intended for highly experienced property loss decision makers. Attendance is generally limited to insurance company personnel, independent adjusters, underwriting and trade association personnel and staff counsel for such companies, adjusting organizations, or associations.
You can access an application by clicking on “Nat. Forum” in the LEA banner on our home page.
For More Information:
Contact: Joseph A. Gerber, Esq.
LEA Annual Meeting Agenda – June, 2004 – Portland, ME
The Annual Meeting will be held at the Marriott at Sable Oaks, South Portland, ME, June 16 – 18, 2004. Inquiries should be made to John Paulson at 315-853-5400. Meeting information is currently schedule to go out around the end of April, 2004. The current schedule of events and program content is listed below.
Wednesday, June 16
10:00 AM - 5:00 PM - Registration - hotel lobby.
6:00 PM - 8:00 PM - Welcoming reception (provided by LEA).
Thursday, June 17
8:30 AM - 9:45 AM - Business Meeting (all registrants). Grand Ballroom. This meeting will include a detailed discussion and demonstration of the enhanced LEA Website.
9:45 AM – 10:45 AM – General Session presentation. “Who is Stealing Your Identity and Personal Information, as well as your Company’s Property? Does Communication Technology Contain an Inherent Risk?” (all registrants). Grand Ballroom.
Our communication networks are expanding and increasingly using uniform platforms- with uniform vulnerabilities. As the inevitable nears that we are never without our devices as they become integrated into our homes and cars, our PDA/telephones, credit cards and even our keys will operate through wireless and satellite technology. We will need to take steps to protect our personal and corporate information from unauthorized people.
In this general session presentation, Nicholas Pasciullo, ESQ., of White and Williams LLP. Pittsburgh, PA, and Samuel P. Gerace, JR., former Vice-President, ValueClick Corp., Cleveland, OH, will provide startling information about what is occurring. There will be discussion regarding identity theft, emerging and changing hacker and insider profiles, wireless and satellite security, and various provisions of the Computer Fraud and Abuse Act components and the Patriot Act.
We will be provided with suggestions on the relatively simple, and perhaps not so simple, things we should do to keep prying eyes and ears away from out information.
10:45 AM – 11:15 AM – Break- Hall area. (Coffee, Tea and Water will be provided by LEA)
11:15 AM – 12:30 PM – “How to Avoid Being Ambushed by Your Reports.”(All Registrants) Grand Ballroom.
This presentation will discuss how to communicate necessary facts and opinions to an insurer while avoiding being impeached by your reports if the claim goes into litigation.
Speaking will be Charles J. Reilly, Jr., CPCU, President of Edward R. Reilly & Co., Inc., New York City, who will address the essentials of the adjusters’ report; Thomas J. Russo, President of Thomas J.Russo Consultants, Ltd., New York City, will discuss how he prepares his reports on the cause and origin of fires; Ronald E. Wolfe, Senior Vice-President of GNY Insurance Companies, New York City, will tell you what information an insurer requires from its adjusters and experts; and Daniel J. Friedman, Esq., of Abrams, Gorelick, Friedman & Jacobson, P.C., New York City, will discuss the “Do’s and Don’ts” of report writing and maintaining a first-party claim file. Michael E. Gorelick, Esq., also of the Abrams, Gorelick firm, will serve as a moderator.
12:30 PM – 1:30 PM – lunch (provided by LEA.) Casco Bay Room
1:30 PM – 4:30 PM – Four concurrent workshops (Select one.) (Refreshments provided in hall area approximately 3 PM by LEA). Room assignments will be provided in the hand-out program in June and posted in the hotel.
Workshop # 1 - “Service Interruption Claims After Disaster: Investigation, adjustment, coverage and subrogation”.
Two recent catastrophic events triggered an extraordinary number of electric and telephonic service interruption contingent B.I. claims - 9/11/01 World Trade Center and 8/14/03 US/Canada Northeast Power Outage. Be it by terrorist attack, earthquake, hurricane, or just plain human error (like last August), US and Canadian electric and telephone utilities have been shown to be particularly vulnerable. Woven together in huge regional networks and grids, a failure in one region or even one utility can have drastic effects on customers of far away, but interconnected utilities.
Service Interruption claims following large disasters pose particularly Difficult challenges for insurers seeking to investigate and adjust such losses. Government tries to control sites and witnesses while it does its own investigation. Local governments and state Public Utility Commissions have their special jurisdictional goals. Most recently, Federal national security limitations blocked or slowed access to critical information. Utilities are very protective of their own proprietary information and fear of suits by third parties. This is a special problem when an insured utility shuts down due to another, uninsured utility that has no incentive to cooperate. Insured customers are not patient with the delays and roadblocks insurers face.
Through the use of hypothetical problems, this workshop will focus on investigative techniques for gaining access in this new environment. We will highlight adjustment practices that are being deployed with some success. The most common Service Interruption coverage issues will be explored with a review of the prevailing consensus of opinions. Lastly, we will suggest possible paths for seeking subrogation recoveries from potentially liable third parties. Lessons from 9/11/01 and 8/14/03 will be shared.
This workshop will be presented by: Richard B. Allyn, Esq. and Terry Joy, Esq., both from Minneapolis, MN and Bill Erickson, Esq., Boston, MA, all of Robins Kaplan, Miller & Ciresi LLP; Jonathan I. Mishara, Esq.,Vice President, Assistant General Counsel and Manager of Litigation, FM Global, Johnston, R.I.; and Harris E. Berenson, Esq., Assistant Vice President and Managing Counsel, Liberty Mutual Property, Weston, MA.
Workshop # 2 – “From the Lion’s Den - Getting Inside the Minds of Defense Attorneys – Subrogation from the Opposition Perspective.”
“Know your enemy and know yourself and you will never be defeated in battle” – Sun Tzu – The Art of War.
Manufacturers can be formidable opponents in subrogation. This workshop will look at the tactics and techniques they use to defend claims and dig beneath to reveal ways to anticipate and counter them. The workshop will begin with a brief review of the elements of product liability, negligence, and breach of warranty. Next, it will look at the selection and use of experts, management of incident scenes, and evidence handling critical to subrogation success. The panel will discuss defense tactics, including the manipulation of discovery, protective orders, disinformation, muddying the waters, Daubert challenges, ignorant manufacturer representatives and spoliation claims.
This workshop will be presented by Roger B. Tate, P.E., Chief Engineer, and Al W. Griffin, CFEI CFII, Territorial Manager, both of Unified Investigations & Sciences, Inc., Dallas, TX.
Workshop # 3 - “Property Claims Dealing with Boiler & Machinery ... with a Twist!”.
This workshop will analyze the common problems that exist in the adjustment of property claims at industrial plants, including nuclear power stations. Case studies will consider electrical and mechanical breakdown losses to turbines, generators and transformers as well as the nuclear steam generator. These case studies will contrast traditional All Risk and Boiler & Machinery coverage’s to highlight the similarities (and differences) to nuclear property forms.
This workshop will be presented by Mark Bruckmann, Esq., of Bruckmann & Victory, New York City; Alan Ball of Douglas Peterson & Associates,Greenfield, MA; Robert Rubinstein of Matson, Driscoll & Damico, Parsippany, NJ; and Robert Munger, Claims Manager, Nuclear Electric Insurance Limited, Wilmington, DE.
Workshop # 4 – “Mold and other Claims – The Deck is Not Stacked Against You.”
There are many factors with each and every loss which require prompt decisions starting with the coverage in place, the type of loss, necessary emergency work, definitive scope for the recovery, the consultants needed and the use of restoration companies. The first 24 to 36 hours are crucial. This is when you will determine whether you and your plan is on firm ground or on quicksand. How does the adjuster control costs including overtime and change orders? How does an adjuster determine whether too much expensive supervision and management of the recovery effort is taking place?
Making clear and definitive decisions will enable all parties to the loss to be working off the same set of plans and not be “majoring in minors” as the loss adjustment and recovery proceeds. These time-sensitive decisions are cost-effective and greatly reduce problems in the adjustment of the loss.
What are the pitfalls to look for when restoration begins? Understand time and material billing ..too much or too little? Understanding that those working for or assisting the insurer are not necessarily adversarial.
Telephones, cell phones, email, message pagers, USPS, UPS, FedEx - weall have or use them - then why are we not communicating?
This workshop will be presented by Tommy Stanley, Partner. Meridian Restoration Consultants LLC, Fort Worth, TX; William S. (Sandy) Rodgers, Senior V. P. & Consultant, Property Resource Group Claims, Willis Risk Solutions, Nashville, TN; and Paul D. Lettau, Director, Major Case Unit, St. Paul Travelers, Youngstown, OH; and Joe Slane, Independent Adjuster, Engle Martin Company, Philadelphia, PA.
6:00 PM - Reception and Maine Lobster Bake at the Marriott. (Provided by LEA). Grand Ballroom. The “Bake” will be followed by a Casino Night at The Marriott.
Friday, June 18
8:30 AM – 11:30 – AM – Repeat of the four workshops. Same room assignments. (Select one.) Coffee, tea and water will be provided by LEA around 10 AM in the hall area.
11:30 AM – an LEA officer will provide conference concluding comments at the end of each workshop.
Future Dates to Plan in Your Calendar
• January, 19 – 21, 2005 – Tampa, FL
• June, 15 – 17, 2005 – Baltimore, MD